Base: The Ethereum Layer 2 Blockchain by Coinbase

Recently, the popular trading platform Coinbase has begun to focus on offering other goods and services to its users. Base is one of Coinbase's newest web3 products, a blockchain ecosystem that could potentially attract a lot of developers. If you're interested in learning why Base is so exciting, explore this guide to learn how it works and what features it provides.

Key Takeaways:

• Base is a Layer 2 network that operates on the Ethereum blockchain. It promises to provide developers with an affordable, easy way to build decentralized apps that work with the Coinbase ecosystem.
• The mainnet for Base officially launched to the public on Aug 9, 2023.
• According to Coinbase, the company does not currently plan to issue a new network token for Base. 

What Is Base?

What Is a Layer 2 Blockchain?

To fully understand what Base is, it's necessary to understand Layer 2 chains. A Layer 2 network is an off-chain network that operates alongside the underlying blockchain network. Ethereum Layer 2 chains follow the same basic structure as the main blockchain. They can manage smart contracts, and have the same secure access as the main chain. However, they have fewer transaction fees and are more scalable than the main blockchain.

History of Base

The Base network was designed and released by Coinbase. Though the project has been in development for some time, it was only announced in 2023. On Feb 23, 2023, Coinbase introduced Base to the world by announcing the testnet launch. The team behind the project explained that they were releasing Base to make a low-cost, developer-friendly way to create DApps, with the hope that this project will encourage the development of crypto products while also making it easier for people to access Coinbase's services.

What Is Coinbase?

The main reason Base is generating so much press is because of the company behind the project. Coinbase is currently one of the largest cryptocurrency exchanges in the United States. Created in 2012, its trading platform helps people to buy, sell, exchange and store cryptocurrency. It also offers some other products, such as stablecoins, a cryptocurrency debit card and an API for merchants who want to accept crypto payments.

Coinbase is joining Optimism as a core developer on the open-source OP Stack, which is the developer toolkit used for Optimism.

What Does Base Aim to Achieve?

Base’s project has a few different goals. On the surface, the main focus is simply providing developers with secure and easy access to an Ethereum Layer 2 network. Coinbase asserts that they hope the project will be a low-cost "bridge," making it easy for users to create other products for the crypto economy.

Base aims to solve some issues with other Layer 2 networks as well. It will feature open-source OP Stack software that’s publicly available, so other users can fork the chain and make their own version as desired. The developer-friendly open source OP Stack system is customizable and modular, and is designed to be interoperable with other chains and fully decentralized. This has the potential to make the system a valuable tool for developers.

There’s also a more practical motivation behind Base's production: Unlike many other Layer 2 Ethereum chains, Base will have direct connections to Coinbase's products. For example, if a developer creates a blockchain-based game, they can use this system to help their users easily cash out their tokens on Coinbase. It has the potential to help Coinbase maintain its popularity as crypto users pivot from traditional investors to web3 enthusiasts.

How Does Base Work?

Base uses Layer 2 technology to save developers money while offering all the features of Ethereum. This works by creating a secondary blockchain that runs parallel to the main Ethereum chain. The Layer 2 network processes transactions for everyone working on the new network. Once the transactions are finalized, it sends them to Ethereum Layer 1. The main Ethereum blockchain then writes this data in its ledger, and it becomes an official part of the main chain.

The network also uses another mechanism called a rollup, which is essentially a type of transaction bundle. Rollups take data from hundreds of different transactions and compress it into a single transaction that's posted on the main chain. By combining many similar transactions, Base further reduces the amount of money it costs to add transactions to the Ethereum chain.

How Is Base Different From Ethereum?

Base is intentionally designed to be as close to Ethereum as possible. The developers built it on the Bedrock version of the open-source OP Stack, so designing a product on Base is almost identical to the experience of designing one on Ethereum. The main difference is simply that Base features a lower cost for transactions and a shorter processing time for blocks. There are also several other slight differences, such as different terminology for some opcodes and a lack of support for certain uncommon networks.

Features of Base

In addition to offering Layer 2 access, Base aims to provide developers with many other helpful features.

Node Providers

Developers can deploy and run their own Base node if they choose to do so. However, for those who prefer not to deal with the expense and challenge of running a node, Base offers access to many third-party node providers. Node network offering options include Ankr, Blast, QuickNode, Unifra and several other popular services.

Bridge

Bridges, an essential Layer 2 network offering for developers, help to transfer data from one blockchain to another. The current bridges in Base let you send ETH tokens from Layer 1 to Layer 2, which makes it easy for early stage projects to build a base ecosystem fund or move their profits to another location.

Oracles

Blockchain oracles are an incredibly helpful feature that lets people add real-world data to on-chain functions. Right now, Optimism's OP Stack system primarily supports price-feed oracles. Oracles like Pyth Network and Chainlink check prices for popular cryptos and send that data to Base. Developers can use these oracle tools to set up smart contracts that behave in a certain manner when predetermined prices are reached. This will eventually create the ability to add automation to the Base network.

Toolchains

To make Base as developer-friendly as possible, the Layer 2 network includes several toolchains. These are systems that make it much easier to create early stage projects. They provide developers with a quick way to perform complex tasks instead of having to code each step one by one. Current toolchains supported by Base include Foundry, Hardhat, thirdweb CLI and Truffle. These toolchains help with everything from smart contract compilation to debugging.

Block Explorers

Block explorers make it much easier to filter the vast amounts of data found on Base. Instead of having to read a bunch of raw data, developers can use a simple, convenient interface to explore transaction info, smart contract source codes and more. The network's OP Stack system is compatible with options like Blockscout, Etherscan and DexGuru.

Network Faucets

Development on the Base network is low cost, but it's not free. Developers will still need a base ecosystem fund to pay for transactions. Network faucets let you add ETH to Base so you can pay gas fees and other relevant expenses. Coinbase has an integrated faucet in their Coinbase Wallet that provides secure access to ETH. You can just log in to your account and directly withdraw ETH to use on Base. The system also supports third-party faucets like Bware Labs and QuickNode.

Base vs. Arbitrum vs. Polygon

While Base is certainly an exciting new Layer 2, it's not the first project to come up with this concept. There are some other networks that aim to provide an affordable and easy way for developers to work on Ethereum.

Polygon is a popular option that offers some Layer 2 scaling and rollup mechanisms. However, the underlying Polygon network isn’t a Layer 2 system like Base. Instead, it's a sidechain that’s compatible with Ethereum, but uses a different consensus algorithm.

Arbitrum is another commonly used choice that does run on Layer 2 Ethereum networks, just as Base does. However, it doesn't use an EVM-compatible machine to process its transactions, and it has slightly lower transaction speeds than other options on the market.

The Impact of Base on Ethereum

Layer 2 solutions like Base have a very positive impact on Ethereum. Since they reduce network congestion on Ethereum Layer 1, users don't have to deal with skyrocketing transaction fees and declining transaction speeds every time a developer wants to test a new product. At the same time, they also draw positive attention to Ethereum. By helping developers build DApps that run on the Ethereum network, Base helps to solidify Ethereum's position as the favorite network for designing web3 crypto products.

Base Road Map

Base has accomplished a lot since launching its testnet in February 2023. The network has achieved all the criteria of its initial road map, including increased security, infrastructure reviews, Bedrock upgrades and extensive audits.

Base launched its mainnet for builders in July 2023, and on Aug 9, 2023, it launched its mainnet to the public. In addition to opening the mainnet, the road map for 2023 and 2024 also includes transitioning to Level 2 rollups and adding more decentralization to the network.

Will There Be a Base Token?

According to Coinbase, the company doesn’t currently plan to create a new network token for Base. The system simply runs on standard Ethereum tokens. However, Coinbase notes that there have been some issues with scammers trying to sell fake Base coins, passing them off as the native token of the Base blockchain. Therefore, investors need to be cautious, and check with the Coinbase ecosystem before purchasing any Base tokens. Coinbase will alert the public if it changes course, and does decide to release a new native gas token for the blockchain.

Closing Thoughts

At a glance, Base is simply a standard Layer 2 system like Arbitrum, Polygon and many others. However, it stands apart because of its thorough integration with the Coinbase system. The ability to quickly and easily make DApps that work with the biggest crypto exchange in the U.S. provides a lot of fantastic opportunities for developers. This project might seem simple at first glance, but it could lead to impressive results.

#Bybit #TheCryptoArk